Rumor Has It: Apple Looking to Acquire AdMob Competitor

The Google/Apple war appears to be in the arms race stage at the moment, with the Nexus One set to be unveiled today as the latest weapon in the Google arsenal. Apple, for its part, appears to be momentarily playing catch-up, with plans to acquire another mobile advertising company now that Google is in the process of snatching up AdMob.

Quattro Wireless is the advertising company in question, and while it is much smaller than AdMob, which is by far the industry heavyweight in the mobile space, it will allow Apple to stay in competition with Google in this increasingly lucrative market.

Apple is said to be paying around $275 million for Quattro Wireless, according to several sources speaking to Kara Swisher of BoomTown. That’s considerably less than the $750 million bid that won Google the AdMob acquisition. Quattro is still by far the smaller company, though it still caters to high-profile clients like the NFL, Ford and Disney.

Swisher claims the acquisition is a done deal at this point, and will be announced as soon as this afternoon. Even counting this and the AdMob acquisition, there are still many players in the booming mobile ad field, and Swisher expects many more similar deals to take place in the future between other major hardware and telecom companies and the advertising startups.

The acquisition will have an immediate impact on the smartphone economic ecosystem, since both companies are now set to become major players on the hardware, software and advertising side of Internet-connected mobile devices. But the real boon for consumers will come as the overall competition between Google and Apple continues to deepen.

As much potential as there is in a continued close working relationship between the two companies (the Maps alone should be the only example you ever need, though there are many more) for iPhone users, I still believe even more exists in a widening gap between the two tech industry stars.

The Nexus One is a great example. By all accounts, it will at the very least be the best Android device available, and best of all, it seems like it could bring in a new ultra-competitive pricing model that will shift the uneven balance of service contract power away from cell service providers and towards consumers. Contracts likely won’t go away, but telcos will have to offer much more significant incentives to get people to sign on, like truly unlimited plans.

Apple’s position at the top of the smartphone heap won’t be nearly as comfortable as before, and a position of discomfort is much more likely to breed innovation than the alternative, both in terms of hardware and sales strategy. So pull up a seat and watch the sparks fly. Can’t wait to see what new goodies are forged in the heat of battle.